AGREEMENT AND PLAN OF MERGER BY AND AMONG REPUBLIC AIRWAYS HOLDINGS INC., RJET ACQUISITION, INC. AND MIDWEST AIR GROUP, INC. Dated as of June 23, 2009
| EXHIBIT 10.62(f) |
AGREEMENT
AND PLAN OF MERGER
BY
AND AMONG
RJET
ACQUISITION, INC.
AND
MIDWEST
AIR GROUP, INC.
Dated
as of June 23, 2009
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ARTICLE
1 - THE MERGER
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1.1
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Merger
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1.2
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Closing
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1.3
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Effective
Time
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1.4
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Effect of the
Merger
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1.5
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Surviving Corporation’s Charter
Documents
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1.6
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Surviving Corporation’s Directors
and Officers
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1.7
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Conversion of
Securities
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1.8
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Exchange
Procedures
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1.9
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Adjustments for Dilution and
Other Matters
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1.10
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Company
Deliverables
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1.11
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Tax Treatment of
Merger
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ARTICLE
2 - REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
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2.1
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Organization, Good Standing and
Qualification
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2.2
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Capitalization
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2.3
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Subsidiaries
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2.4
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Authority;
Approval
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2.5
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Third Party Consents; No
Violations
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2.6
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Financial
Statements
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2.7
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Absence of Certain
Changes
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2.8
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Litigation
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2.9
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Employee
Benefits
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2.10
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Compliance with Laws;
Licenses
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2.11
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Material
Contracts
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2.12
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Property
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2.13
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Environmental
Matters
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2.14
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Taxes
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2.15
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Labor
Matters
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2.16
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Intellectual
Property
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2.17
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Aircraft
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2.18
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Slots
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2.19
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Gate
Interests
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2.20
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U.S. Citizen; Air
Carrier
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2.21
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Insurance
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2.22
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Brokers and
Finders
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ARTICLE
3 - REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE MERGER
SUB
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3.1
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Organization
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3.2
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Authority
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3.3
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Consents and
Approvals
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3.4
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No
Conflicts
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3.5
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Brokers and
Finders
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ARTICLE
4 - COVENANTS
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4.1
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Conduct of the Business Pending
Closing
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4.2
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Notice of Incidents; Accidents
and Litigation
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4.3
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Information Rights and
Access
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4.4
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Governmental
Consents
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4.5
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Third Party
Consents
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4.6
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Publicity
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ARTICLE
5 – ADDITIONAL AGREEMENTS.
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5.1
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No Control of Other Party’s
Business
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5.2
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Transfer
Taxes
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5.3
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Takeover
Statute
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ARTICLE
6 - CONDITIONS OF MERGER
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6.1
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Conditions to Both the Parent’s
and the Company’s
Obligations
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6.2
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Additional Conditions Applicable
to Parent and Merger
Sub
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6.3
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Additional Conditions Applicable
to Company
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ARTICLE
7 - TERMINATION
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7.1
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Termination
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7.2
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Notice of Termination; Effect of
Termination
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ARTICLE
8 - GENERAL PROVISIONS
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8.1
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Non-Survival of Representations
and Warranties
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8.2
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Notices
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8.3
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Amendments and
Waivers
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8.4
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Interpretation
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8.5
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Fee and
Expenses
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8.6
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Further
Assurances
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8.7
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Entire
Agreement
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8.8
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Severability
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8.9
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Assignment
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8.10
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Governing
Law
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8.11
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Injunctive
Relief
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8.12
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No Third Party
Beneficiaries
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8.13
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Counterparts
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8.14
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Time is of the
Essence.
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| Exhibit A |
Glossary
of Defined Terms
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| Exhibit B |
Calculation
of Per Shareholder Consideration
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AGREEMENT
AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF
MERGER is dated and effective as of June 23, 2009, by and among Republic
Airways Holdings Inc., a Delaware corporation (the “Parent”), RJET
Acquisition, Inc., a Delaware corporation and wholly owned subsidiary of the
Parent (the “Merger
Sub”), and Midwest Air Group, Inc. a Wisconsin corporation (the “Company”). A
glossary of defined terms is attached to this Agreement as Exhibit A.
RECITALS
WHEREAS, the Merger Sub’s
Board of Directors (the “Merger Sub Board”)
has determined that it is advisable to, fair to and in the best interests of its
stockholders for the Merger Sub to merge with and into the Company (the “Merger”) upon the
terms and subject to the conditions set forth in this Agreement and in
accordance with the DGCL and the WBCL;
WHEREAS, the Company’s Board
of Directors (the “Company Board”), the
Parent’s Board of Directors (the “Parent Board”) and
the Merger Sub Board have each approved the Merger, upon the terms and subject
to the conditions set forth in this Agreement;
WHEREAS, the Company, the
Parent and the Merger Sub desire to make certain representations, warranties,
covenants and agreements in connection with the transactions contemplated hereby
and also to prescribe various conditions to consummation of the transactions
contemplated hereby; and
WHEREAS, concurrently with the
execution of this Agreement, TPG Midwest US V, LLC and TPG Midwest International
V, LLC (together, the “TPG Entities”) and
the Parent, are entering into an Investment Agreement, dated as of the date
hereof (the “Investment
Agreement”), pursuant to which, and on the terms and subject to the
conditions of which, the TPG Entities have agreed to assign to the Parent all of
the TPG Entities’ rights and obligations in their capacities as “Lenders” under
the Amended and Restated Senior Secured Credit Agreement, dated as of September
3, 2008, among Midwest Airlines, Inc., a Wisconsin corporation, the Company,
each of the subsidiaries of Midwest from time to time party thereto, each of the
TPG Entities, the Parent, ▇▇▇▇▇ Fargo Bank Northwest, National Association, as
administrative agent and as collateral agent, as amended by Amendment No. 1 to
Amended and Restated Credit Agreement, dated as of October 28, 2008, Amendment
No. 2 to Amended and Restated Credit Agreement, dated as of January 28, 2009 and
Amendment No. 3 to Amended and Restated Credit Agreement, dated as of June 2,
2009, and as further amended, modified or supplemented from time to
time.
NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, and subject to the terms
and conditions set forth herein, the Company, the Parent and the Merger Sub
hereby agree as follows:
| ARTICLE 1 - THE MERGER |
1.1 Merger. Upon
the terms and subject to the conditions set forth in this Agreement, and in
accordance with the DGCL, a certificate of merger to be prepared in accordance
with the DGCL, the WBCL and a plan of merger to be prepared in accordance with
the WBCL, at the Effective Time the Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence
of the Merger Sub shall cease and the Company shall continue as the surviving
corporation of the Merger (the “Surviving
Corporation”) as a wholly owned subsidiary of the Parent incorporated
under the laws of the State of Wisconsin.
1.2 Closing. The
Closing shall be held at such time, date (the “Closing Date”) and
location as may be mutually agreed by the Parent and the Company. In
the absence of such agreement, the Closing shall be held at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, commencing at 10:00 a.m., local time, on the second (2nd)
Business Day after satisfaction or waiver of the conditions set forth in Article 6, below
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions), unless
this Agreement has been theretofore terminated pursuant to Article 7,
below.
1.3 Effective
Time. Contemporaneously
with the Closing, the parties shall cause the Merger to be consummated by filing
a Certificate of Merger (the “Certificate of
Merger”) with the SSSD and Articles of Merger (the “Articles of Merger”)
with the DFI in accordance with the DGCL and the WBCL, respectively, and any
other required documents, in such form as required by applicable law, and
executed in accordance with the relevant provisions of the DGCL or WBCL, as
applicable.
1.4 Effect of the
Merger. At
the Effective Time, the Merger shall have the effect provided in this Agreement
and the applicable provisions of the DGCL and the WBCL. Without
limiting the generality of the foregoing, at the Effective Time, all of the
property, rights, privileges, powers and franchises of the Merger Sub and the
Company shall vest in the Surviving Corporation, and all debts, liabilities,
obligations and duties of the Merger Sub and the Company shall become the debts,
liabilities, obligations and duties of the Surviving Corporation.
1.5 Surviving Corporation’s
Charter Documents. At
the Effective Time, each of the Articles of Incorporation and By-Laws of the
Company, as in effect immediately before the Effective Time, shall be the
Articles of Incorporation and By-Laws of the Surviving Corporation upon and
after the Effective Time until thereafter amended as provided by law and such
Articles of Incorporation and By-Laws.
1.6 Surviving Corporation’s
Directors and Officers. At
the Effective Time, the directors and officers of the Merger Sub immediately
prior to the Effective Time shall be the initial directors and officers of the
Surviving Corporation, each to hold office in accordance with the Surviving
Corporation’s Articles of Incorporation and By-Laws.
1.7 Conversion of
Securities. At
the Effective Time, by virtue of the Merger and without action on the part of
any of the Parent, the Merger Sub, the Company or any of their respective Boards
of Directors or shareholders or stockholders:
(a) Conversion of
Shares. The
shares of the common stock, $.01 par value, of the Company (“Company Common Stock”
or “Shares”)
issued and outstanding immediately prior to the Effective Time, other than (i)
Shares held in the treasury of the Company, (ii) Shares owned by the Parent, the
Merger Sub or any other Parent Subsidiary, and (iii) Shares owned by the Company
(clauses (i) through (iii) hereof, collectively, “Excluded Shares”),
shall cease to be outstanding and shall be converted into the right to receive
an aggregate amount in cash equal to $1.00, which amount shall be allocated
among the holders of the Shares as set forth on Exhibit
B attached hereto opposite the name of such shareholder under the heading
“Purchase Price Allocation,” it being agreed that the dollar amount that each
shareholder is entitled to receive is being rounded to the nearest whole cent
and that amounts payable that are equal to or less than $0.005 are being rounded
down to $0.00 (the “Consideration”).
(b) Cancellation of Excluded
Shares. Each
Excluded Share shall be cancelled and retired and shall cease to exist and no
consideration shall be delivered in exchange therefor.
(c) Conversion of Merger Sub
Shares. Each
outstanding share of capital stock of Merger Sub issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding and shall
be converted into one share of capital stock, of the same class and series, of
the Surviving Corporation and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation. Each outstanding option,
warrant or other instrument or security of the Merger Sub which is convertible
into, exchangeable for or exercisable for shares of capital stock of the Merger
Sub and is outstanding immediately prior to the Effective Time shall cease to be
outstanding and shall be converted into an option, warrant or other instrument
or security with the same terms and that is convertible into, exchangeable for
or exercisable for shares of capital stock of the Surviving Corporation, of the
same class and series. The Articles of Merger shall specifically
provide that all classes and series of capital stock of Merger Sub shall be
treated at the Effective Time as provided in this Section
1.7.
1.8 Exchange
Procedures.
(a) Exchange. The
Parent shall deliver or cause to be delivered the Consideration to the holders
of Shares entitled to any Consideration, as indicated in Exhibit B, in
exchange for each such holder’s stock certificate, if such holder’s Shares are
certificated. In the event that a holder is not entitled to any
Consideration for such holder’s shares pursuant to Section 1.7(a), such holder’s
Shares shall be deemed cancelled as of the Effective Time, and shall be retired
and shall cease to exist, in exchange for no consideration.
(b) No Further Rights in the
Shares. Each
Share shall be deemed at any time after the Effective Time to represent only the
right to receive upon such surrender the applicable Consideration, if any, as
contemplated by Section 1.7.
The
Consideration, if any, paid as set forth in Section 1.7(a) shall
be deemed to have been issued and paid in full satisfaction of all rights
pertaining to the Shares.
(c) No
Liability. Notwithstanding
anything herein to the contrary, neither the Parent nor the Merger Sub shall be
liable to any holder of Shares for any cash or other payment delivered to a
Governmental Entity pursuant to any abandoned property, escheat or similar
Laws.
(d) Withholding
Right. The
Parent shall be entitled to deduct and withhold from the Consideration otherwise
payable pursuant to this Agreement such amounts as the Parent is required to
deduct and withhold with respect to the making of such payment under the Code,
or any provision of applicable Law, and the Parent shall timely pay over such
withheld amounts to the appropriate Governmental Entity. To the
extent that amounts are so withheld by the Parent, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to the former
holder of the Shares in respect of which such deduction and withholding was
made.
(e) Lost, Stolen or Destroyed
Certificate. If
any Share certificate shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the Person claiming such Share certificate to be
lost, stolen or destroyed and, if requested by the Parent, the posting by such
Person of a bond, in such reasonable amount as the Parent may direct, as
indemnity against any claim that may be made against it with respect to such
Share certificate, Parent will pay, in exchange for such lost, stolen or
destroyed Share certificate, the applicable Consideration to be paid in respect
of the Shares represented by such Share certificate.
1.9 Adjustments for Dilution and
Other Matters. If,
between the date of this Agreement and the Effective Time, there is a
recapitalization, reclassification, stock split, stock dividend, subdivision,
combination or exchange of shares with respect to, or rights issued in respect
of, the Shares (each, an “Adjustment”), the
Consideration shall be adjusted accordingly, without duplication, to provide the
holders of Shares with the same economic effect as contemplated by this
Agreement prior to such Adjustment.
1.10 Company
Deliverables. At
or prior to the Effective Time, the Company shall deliver or cause to be
delivered to the Parent a copy of a resolution of the Company Board canceling,
effective immediately prior to the Effective Time, all outstanding options
issued under the Midwest Air Group, Inc. Incentive Plan (the “Plan”) pursuant to
Section 7(c)(B) thereof in exchange for no consideration, being that the
exercise price per share of such options is greater than the per share
Consideration that a holder of a Share is entitled to receive under Section 1.7(a) of
this Agreement.
1.11 Tax Treatment of
Merger. The
parties agree that for United States federal and state income tax purposes the
Merger shall be treated as a taxable purchase of all of the outstanding Shares
(other than Excluded Shares) by Parent for the Consideration, and the parties
further agree that they shall report and file all Tax Returns consistent with
such treatment.
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ARTICLE
2 - REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
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Except as
set forth in the corresponding section of the disclosure letter to be delivered
to the Parent and the Merger Sub by the Company on or prior to July 3, 2009 (the
“Disclosure
Letter”), it being understood that matters disclosed pursuant to one
section of the Disclosure Letter shall be deemed disclosed with respect to any
other section of the Disclosure Letter where it is reasonably apparent that the
matters so disclosed are applicable to such other section, the Company hereby
represents and warrants that:
2.1 Organization, Good Standing
and Qualification. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Wisconsin and has all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as presently conducted and is qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction where the ownership or leasing of its assets or properties or
conduct of its business requires such qualification, except where the failure to
be so organized, validly existing, qualified or in good standing or active
status, or to have such power or authority, would not reasonably be expected to
result in a Material Adverse Effect. Attached as Schedule 2.1 of the
Disclosure Letter are the complete and correct copies of the Company’s Articles
of Incorporation and By-Laws, each as amended to date.
2.2 Capitalization. The
authorized capital stock of the Company consists of 1,000,000,000 shares of
Common Stock. The Shares constitute all of the issued and outstanding
shares of Common Stock and except for stock options granted to certain employees
of the Company under the Plan, which options are being canceled for no
consideration as set forth in Section 1.10 hereof,
there are no outstanding securities, options, warrants, calls, rights,
contracts, commitments, agreements, arrangements or understandings to which the
Company or any of its subsidiaries is a party, or by which any of them is bound,
obligating the Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, shares of capital stock or other
securities of the Company or any of its subsidiaries. There are no
obligations of the Company to repurchase, redeem or otherwise acquire any shares
of Common Stock or the capital stock or other equity interests of any of its
subsidiaries or to provide funds to or make any investment in any of its
subsidiaries or any other Person.
2.3 Subsidiaries. All
of the outstanding shares of capital stock of each subsidiary of the Company
that is a corporation have been duly authorized and validly issued and are fully
paid and nonassessable, subject to the personal liability which may be imposed
on shareholders by former Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law and the rules and regulations promulgated thereunder, if any,
each as amended from time to time (the “WBCL”) for debts
incurred prior to June 14, 2006 (for debts incurred on or after such date,
Section 180.0622(2)(b) of the WBCL has been repealed) owing to employees for
service performed, but not exceeding six (6) months service in any one case, and
were not issued in violation of any preemptive or similar right of any
shareholder of the Company or any other Person. No shares of any subsidiary of
the Company are owned by any Person other than the Company. Except for the
capital stock and other equity interests of subsidiaries of the Company, the
Company does not own, directly or indirectly, any capital stock or other
ownership interest in any Person.
2.4 Authority;
Approval.
(a) The
execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the Merger and the other transactions
contemplated hereby are within the Company’s corporate powers and, except for
the filing and recordation of the Certificate of Merger in accordance with the
DGCL and the Articles of Merger in accordance with the WBCL, have been duly and
validly authorized by all necessary corporate action on the part of the Company
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and
delivered by the Company and, assuming that this Agreement constitutes the
legal, valid and binding obligation of the Parent and the Merger Sub,
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles.
(b) The
Company Board at a meeting duly called and held on or prior to the date hereof
has approved and adopted this Agreement and the transactions contemplated
hereby, including the Merger.
2.5 Third Party Consents; No
Violations.
(a) No
notices, reports or other filings are required to be made by the Company with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained or any actions required to be taken, by the Company
from, as applicable, any Governmental Entity or other Person in connection with
the execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby, except for
notification to the DOT of the substantial change in ownership and management of
subsidiaries of the Company and such filings, if applicable, as the DOT might
require with respect to the international and exemption authority of
subsidiaries of the Company.
(b) The
execution, delivery and performance of this Agreement by the Company does not,
and the consummation by the Company of the transactions contemplated hereby will
not, constitute or result in (i) a breach or violation of, or a default under,
the Company’s Articles of Incorporation or By-Laws, or (ii) with or without
notice, lapse of time or both, a breach or violation of, a termination or
default under, the creation or acceleration of any obligations under or the
creation of a Lien on any of the assets of the Company pursuant to, (x) any
Contract binding upon the Company or (y) any material Law to which the Company
is subject or any Company License; except in the case of clause (ii)(x), above,
for any such breach, violation, termination, default, creation, acceleration or
change that would not reasonably be expected to result in a Material Adverse
Effect.
2.6 Financial
Statements.
(a) The
Company has delivered to the Parent copies of the Company’s audited consolidated
financial statements as of, and for the years ended, December 31, 2007 and 2006
and unaudited consolidated financial statements as of, and for the three months
ended, March 31, 2009.
(b) The
consolidated financial statements (including, in each case, any related notes
thereto) have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
thereto) and each fairly presents in all material respects the consolidated
financial position of the Company and subsidiaries of the Company as of the
respective dates thereof and the consolidated results of its operations and cash
flows and changes in financial position for the periods indicated, except that
any unaudited interim financial statements do not contain the notes required by
GAAP and were or are subject to normal and recurring year-end adjustments, which
were not or are not expected to be material in amount, either individually or in
the aggregate.
(c) The
Company has established and maintains “disclosure controls and procedures” (as
defined in Rule 13a-15(e) promulgated under the Exchange Act) that are
reasonably designed to ensure that material information (both financial and
non-financial) relating to the Company and the subsidiaries of the Company is
recorded, processed, summarized and reported, and that such information is
accumulated and communicated to the Company’s principal executive officer and
principal financial officer, or persons performing similar functions. For
purposes of this Agreement, “principal executive officer” and “principal
financial officer” shall have the meanings given to such terms in
▇▇▇▇▇▇▇▇-▇▇▇▇▇.
(d) The
Company has established and maintains a system of internal control over
financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange
Act) (“internal
controls”). To the Knowledge of the Company, such internal controls are
sufficient to provide reasonable assurance regarding the reliability of the
Company’s financial reporting and the preparation of the Company’s financial
statements for external purposes in accordance with GAAP.
(e) To the
Knowledge of the Company, the Company has disclosed, based on its most recent
evaluation of internal controls prior to the date hereof, to the Company’s
auditors and audit committee (i) any significant deficiencies and material
weaknesses known to the Company in the design or operation of internal controls
which are reasonably likely to adversely affect in a material respect the
Company’s ability to record, process, summarize and report financial information
and (ii) any material fraud known to the Company that involves management or
other employees who have a significant role in internal controls. The Company
has made available to the Parent a summary of any such disclosure regarding
material weaknesses and fraud made by management to the Company’s auditors and
audit committee since January 1, 2006. For purposes of this Agreement, a
“significant deficiency” in controls means an internal control deficiency that
adversely affects an entity’s ability to initiate, authorize, record, process,
or report external financial data reliably in accordance with GAAP. A
“significant deficiency” may be a single deficiency or a combination of
deficiencies that results in more than a remote likelihood that a misstatement
of the annual or interim financial statements that is more than inconsequential
will not be prevented or detected. For purposes of this Agreement, a “material
weakness” in internal controls means a significant deficiency or a combination
of significant deficiencies, that results in more than a remote likelihood that
a material misstatement of the annual or interim financial statements will not
be prevented or detected.
2.7 Absence of Certain
Changes. Since
December 31, 2008, the business of the Company and the subsidiaries of the
Company has been conducted in the ordinary course consistent with past
practice.
2.8 Litigation. There
is no Proceeding pending or, to the Knowledge of the Company, threatened against
the Company or any of the subsidiaries of the Company that would reasonably be
expected to result in a Material Adverse Effect or challenge, prevent or
materially impair or delay the consummation of the transactions contemplated by
this Agreement. Neither the Company nor any of the subsidiaries of the Company
is subject to or bound by any outstanding Order that would reasonably be
expected to (i) result in a Material Adverse Effect or (ii) prevent or
materially impair or delay the consummation of the transactions contemplated by
this Agreement.
2.9 Employee
Benefits.
(a) The
Company has made available to the Parent a complete and correct copy of (to the
extent applicable): (i) all material employee benefit plans (as defined in
Section 3(3) of ERISA), and all bonus, stock option, stock purchase, restricted
stock, incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance, flight benefits and other benefit plans,
programs or arrangements, and all written employment, termination, severance and
other employment Contracts or written employment arrangements, with respect to
which the Company or any Company ERISA Affiliate has any obligation, whether
absolute, accrued, contingent or otherwise due or to become due (each, a “Company Benefit
Plan”) (or, if such Company Benefit Plan is not written, a written
summary thereof) and all amendments thereto; (ii) each trust or insurance policy
relating to each Company Benefit Plan; (iii) the most recent summary plan
description or other written explanation of each Company Benefit Plan provided
to participants; (iv) the most recent annual report (Form 5500) filed with the
U.S. Department of Labor; and (v) the most recent determination letter, if any,
issued by the IRS with respect to any Company Benefit Plan intended to be
qualified under Section 401(a) of the Code. There has been no
material change in flight benefits to employees in the last twelve (12)
months.
(b) Except as
would not reasonably be expected to result in a Material Adverse Effect, (i)
each Company Benefit Plan maintained by the Company or any of the Company ERISA
Affiliates has been maintained in compliance with its terms and, both as to form
and in operation, with the requirements of applicable Law, and (ii) all employer
or employee contributions, premiums and expenses to or in respect of each
Company Benefit Plan have been paid in full or, to the extent not yet due, have
been adequately accrued on the applicable financial statements of the Company in
accordance with GAAP. Neither the Company nor any of the Company ERISA
Affiliates has at any time during the five (5) year period immediately preceding
the date hereof maintained, contributed to, been obligated to contribute to or
incurred any liability under any “multiemployer plan” (as defined in Section
3(37) of ERISA) or any ERISA Benefit Plan that is subject to Title IV of ERISA
or Section 412 of the Code.
(c) As of the
date of this Agreement, there are no pending or, to the Knowledge of the
Company, threatened Proceedings involving a Company Benefit Plan (other than
routine claims for benefits payable under any such Company Benefit Plan) that
would reasonably be expected to result in a Material Adverse
Effect.
(d) Each
Company Benefit Plan that is intended by its terms to be qualified under Section
401(a) of the Code has been determined by the IRS to be so qualified, a timely
application for such determination is now pending or is not yet required to be
filed or the Company or the Company ERISA Affiliate has duly adopted a prototype
plan and is relying on the opinion letter for such prototype plan, and, except
as would not reasonably be expected to result in a Material Adverse Effect, each
such Company Benefit Plan is qualified in operation. Except as would not
reasonably be expected to result in a Material Adverse Effect, neither the
Company nor any of the Company ERISA Affiliates has any liability or obligation
under any welfare plan or agreement to provide benefits after termination of
employment to any employee or dependent other than as required by Section 4980B
of the Code or applicable Law or the terms of a separation or retention plan or
agreement.
(e) On and
after the effectiveness of the Pension Protection Act of 2006, no Company
Benefit Plan currently is, or is reasonably expected to be, in at risk status
(within the meaning of Title IV of ERISA).
(f) No
amounts payable under any of the Company Benefit Plans or any other contract,
agreement or arrangement with respect to which the Company or any subsidiary of
the Company may have any liability could fail to be deductible for federal
income tax purposes by virtue of Section 280G of the Code or Section 162(m) of
the Code.
2.10 Compliance with Laws;
Licenses.
(a) The
businesses of the Company and each subsidiary of the Company have not been, and
are not being, conducted in violation of any applicable operating certificates,
airworthiness directives (“ADs”), Federal
Aviation Regulations (“FARs”) or any other
rules, regulations, directives or policies of the FAA, DOT, FCC, DHS or any
other Governmental Entity, except for such violations that would not reasonably
be expected to result in a Material Adverse Effect. No investigation or review
by any Governmental Entity with respect to the Company or any of the
subsidiaries of the Company is pending or, to the Knowledge of the Company,
threatened, nor has any Governmental Entity indicated an intention to conduct
the same, except for any such investigations or reviews that would not
reasonably be expected to result in a Material Adverse Effect. Each of the
Company and the subsidiaries of the Company has obtained and is in compliance
with all Licenses necessary to conduct its business as presently conducted
(each, a “Company
License”), except for any failures to have or to be in compliance with
such Company Licenses which would not reasonably be expected to result in a
Material Adverse Effect.
(b) Each of
the Company and the subsidiaries of the Company is, and since December 31, 2008,
has been, in compliance with (i) its obligations under each of the material
Company Licenses and (ii) any applicable material Laws and the rules and
regulations of the Governmental Entity issuing such Company Licenses. There is
not pending or, to the Knowledge of the Company, threatened before the FAA, DOT
or any other Governmental Entity any material proceeding, notice of violation,
order of forfeiture or complaint or investigation against the Company or any of
the subsidiaries of the Company relating to any of the material Company
Licenses. The actions of the applicable Governmental Authorities granting all
Company Licenses have not been reversed, stayed, enjoined, annulled or
suspended, and there is not pending or, to the Knowledge of the Company,
threatened any material application, petition, objection or other pleading with
the FAA, DOT or any other Governmental Entity which challenges or questions the
validity of or any rights of the holder under any material Company
License. Neither the DOT nor FAA nor any other Governmental Entity
has taken any action or proposed or, to the Knowledge of the Company, threatened
to take any action, to amend, modify, suspend, revoke, terminate, cancel, or
otherwise affect such Company Licenses, in each case, in a materially adverse
manner.
2.11 Material
Contracts. Neither
the Company nor any subsidiary of the Company is a party to or obligated under
any Contract which (i) obligates the Company or any subsidiary of the Company
for payments in any future calendar year in excess of $500,000, in the
aggregate, and which is not terminable by the Company or the subsidiary of the
Company without additional payment or penalty within one hundred eighty (180)
days of delivery of notice of such termination, (ii) would be considered a
material contract pursuant to Item 601(b)(10) of Regulation S-K under the
Exchange Act (assuming such regulation applied to the Company), and (iii) any
Contract restricting the Company (or the subsidiaries of the Company or
Affiliates) from engaging in any line of business or in any geographic region
(collectively, “Material Contracts”).
Except as would not reasonably be expected to have a Material Adverse Effect,
(a) neither the Company nor any subsidiary of the Company is in breach of or
default (with or without notice, lapse of time or both) under the terms of any
Material Contract, (b) to the Knowledge of the Company, as of the date hereof,
no other party to any Material Contract is in breach of or default (with or
without notice, lapse of time or both) under the terms of any Material Contract
and (c) each Material Contract is a valid and binding obligation of the Company
or the subsidiary of the Company a party thereto and is in full force and effect
assuming that each such Material Contract is a valid and binding obligation of
the other party or parties to the Material Contract.
2.12 Property.
(a) With
respect to each material real property owned by the Company or any subsidiary of
the Company (“Owned
Real Property”), (i) either the Company or subsidiary of the Company has
good and marketable title in fee simple to such Owned Real Property, free and
clear of all Liens other than Permitted Liens, (ii) there are no outstanding
purchase options, rights of first refusal or similar rights in favor of any
other Person to purchase such Owned Real Property or any portion thereof or
interest therein, and (iii) there are no leases, subleases, licenses, options,
rights, concessions or other contracts affecting the ownership, possession or
use of any portion of such Owned Real Property, other than, in the case of
clause (ii) or (iii) above, as would not reasonably be expected to have a
Material Adverse Effect. There are no physical conditions or defects at any of
the Owned Real Properties that impair or would impair the continued use of such
Owned Real Property in the ordinary course of business as presently conducted at
each such Owned Real Property, except for any such conditions or defects that
would not reasonably be expected to have a Material Adverse Effect. Neither the
Company nor any subsidiary of the Company has received notice of any pending,
and to the Knowledge of the Company, there is no threatened, condemnation with
respect to any of the Owned Real Properties, except for any such condemnations
that would not reasonably be expected to have a Material Adverse
Effect.
(b) With
respect to all leases, subleases and other contracts under which the Company or
any subsidiary of the Company uses or occupies any material real property
(“Real Property
Leases”), except as would not reasonably be expected to have a Material
Adverse Effect, (i) to the Knowledge of the Company, each Real Property Lease is
valid, binding and in full force and effect and neither the Company nor any
subsidiary of the Company nor any other party thereto is in breach or default
(with or without notice, lapse of time or both) under any Real Property Lease,
and (ii) no termination event or condition or uncured default on the part of the
Company or any subsidiary of the Company or, to the Knowledge of the Company,
the landlord thereunder exists under any Real Property Lease. Except as would
not reasonably be expected to have a Material Adverse Effect, the Company and
each subsidiary of the Company has a good and valid leasehold interest in each
parcel of material real property leased by it, free and clear of all Liens
except for Permitted Liens. Neither the Company nor any subsidiary of the
Company has received notice of any pending, and to the Knowledge of the Company
there is no threatened, condemnation with respect to any material real property
leased pursuant to any of the Real Property Leases, except for any such
condemnations that would not reasonably be expected to have a Material Adverse
Effect.
(c) The
Company and the subsidiaries of the Company have good and marketable title to,
or valid and enforceable rights to use under existing material franchises,
easements or licenses, or valid and enforceable leasehold interests in, all of
their material tangible personal properties and assets necessary to carry on
their businesses as such businesses are now being conducted, free and clear of
all Liens, except for Permitted Liens.
2.13 Environmental
Matters.
(a) (i) The
Company and the subsidiaries of the Company are in compliance in all material
respects with all applicable Environmental Laws and Environmental Licenses; (ii)
no property currently or, to the Knowledge of the Company, formerly owned or
leased by the Company or any of the subsidiaries of the Company has been the
subject of any investigation by any Governmental Entity or of any demand of
another Person alleging the presence of any Hazardous Substances that would
require material remediation or other material response actions pursuant to any
Environmental Law; (iii) neither the Company nor any of the subsidiaries of the
Company (nor, to the Knowledge of the Company, any Person for whom they may be
liable by Law or Contract) has received any written notice, demand, letter,
claim or request for information alleging that the Company or any of the
subsidiaries of the Company may be in material violation of or subject to
material liability under any Environmental Law; (iv) neither the Company nor any
of the subsidiaries of the Company is subject to any material Environmental
Claim; and (v) to the Knowledge of the Company, there are no past or present
actions, activities, circumstances, conditions, events or incidents, including,
the release, emission, discharge, presence or disposal of any Hazardous
Substances, that could form the basis of any material Environmental Claim
against the Company or any of the subsidiaries of the Company (nor, to the
Knowledge of the Company, any Person for whom they may be liable by Law or
Contract), or otherwise result in any material costs or liabilities under any
Environmental Law, except for matters that would not reasonably be expected to
result in a Material Adverse Effect.
(b) The
Company has made available to the Parent all material assessments, reports,
data, results of investigations or audits, and other information that is in the
possession of or reasonably available to the Company and the subsidiaries of the
Company regarding environmental matters pertaining to the environmental
condition of the business of the Company and the subsidiaries of the Company, or
the compliance (or noncompliance) by the Company and the subsidiaries of the
Company with any Environmental Laws.
(c) The
Company would not be required by virtue of the transactions set forth herein and
contemplated hereby, or as a condition to the effectiveness of any transactions
contemplated hereby, to remove or remediate Hazardous Substances where any such
removal or remediation would reasonably be expected to have a Material Adverse
Effect. The Company and the subsidiaries of the Company are not required by
virtue of the transactions set forth herein and contemplated hereby, or as a
condition to the effectiveness of any transactions contemplated hereby, (i) to
perform a site assessment for Hazardous Substances (ii) to give notice to or
receive approval from any Governmental Entity, except where such failure to give
notice or receive approval would not reasonably be expected to result in a
Material Adverse Effect, or (iii) record or deliver with respect to Owned Real
Property to any person or entity any disclosure document or statement pertaining
to environmental matters.
2.14 Taxes. The
Company and each of the subsidiaries of the Company has timely filed (after
taking into account all applicable extensions) all Tax Returns required to be
filed by them, except where the failure to timely file would not reasonably be
expected to result in a Material Adverse Effect. All such Tax Returns are
complete and correct in all respects, except where the failure of such Tax
Returns to be complete and correct would not reasonably be expected to result in
a Material Adverse Effect. Each of the Company and the subsidiaries of the
Company has paid or caused to be paid all Taxes shown as due on such Tax Returns
and all Taxes owed by the Company and the subsidiaries of the Company for which
no return was required to be filed, except where the failure to do so would not
reasonably be expected to result in a Material Adverse Effect. No deficiencies
for any Taxes have been asserted in writing, proposed in writing or assessed in
writing against the Company or any of the subsidiaries of the Company that have
not been paid or otherwise settled or are not otherwise being challenged under
appropriate procedures, except for deficiencies that, if finally resolved in a
manner adverse to the Company or relevant subsidiary of the Company, would not
reasonably be expected to result in a Material Adverse Effect. No written
requests for waivers of the time to assess any material Taxes of the Company or
the subsidiaries of the Company are pending as of the date hereof. There are no
audits pending or, to the Knowledge of the Company, threatened against the
Company or any of the subsidiaries of the Company that would reasonably be
expected to have a Material Adverse Effect.
2.15 Labor
Matters.
(a) The
Company has made available to the Parent complete and correct copies of all
collective bargaining agreements and other labor union contracts (including all
amendments thereto) applicable to any employees of the Company or any of the
subsidiaries of the Company (the “Company
CBAs”).
(b) No labor
union, labor organization or group of employees of the Company or any of the
subsidiaries of the Company has made a demand for recognition or certification
pending as of the date hereof, and there are no representation or certification
proceedings or petitions seeking a representation proceeding pending as of the
date hereof or, to the Knowledge of the Company, threatened as of the date
hereof to be brought or filed with any labor relations tribunal or authority. To
the Knowledge of the Company, there are no labor union organizing activities
pending or threatened as of the date hereof with respect to any employees of the
Company or any of the subsidiaries of the Company.
(c) Neither
the Company nor any of the subsidiaries of the Company is currently engaged in
any layoffs or employment terminations sufficient in number to trigger
application of the Worker Adjustment and Retraining Notification Act of 1988, as
amended (the “WARN
Act”), the Wisconsin WARN Act, Section 109.07 of the Wisconsin Statutes,
or any similar state, local or foreign law, and neither the Company nor any of
the subsidiaries of the Company has any liabilities under the WARN Act that have
had or would reasonably be expected to have a Material Adverse
Effect.
(d) To the
Knowledge of the Company, no employee of the Company or any of the subsidiaries
of the Company is in any material respect in violation of any term of any
employment-related agreement, nondisclosure agreement, noncompetition agreement,
restrictive covenant or other obligation to a former employer of any such
employee relating (A) to the right of any such employee to be employed by the
Company or any of the subsidiaries of the Company or (B) to the knowledge or use
of trade secrets or proprietary information.
(e) To the
Knowledge of the Company, no current officer or key employee of the Company or
any of the subsidiaries of the Company intends to terminate his or her
employment, whether on account of the transactions contemplated by this
Agreement or for any other reason.
(f) The
Company and each of the subsidiaries of the Company are and have been in
compliance with all applicable Laws respecting employment and employment
practices, including, all laws respecting terms and conditions of employment,
health and safety, wages and hours, child labor, immigration, employment
discrimination, disability rights or benefits, equal opportunity, plant closures
and layoffs, affirmative action, workers’ compensation, labor relations,
employee leave issues and unemployment insurance, except where any failure to be
in compliance would not reasonably be expected to result in a Material Adverse
Effect. To the Knowledge of the Company, the Company and each of the
subsidiaries of the Company are not delinquent in payments to any employees or
former employees for any services or amounts required to be reimbursed or
otherwise paid. Neither the Company nor any of the subsidiaries of the Company
is a party to, or otherwise bound by, any Order relating to employees or
employment practices.
(g) From
December 31, 2008 to the date of this Agreement, there has been no actual, or,
to the Knowledge of the Company, threatened labor disputes, strikes, slowdowns,
work stoppages or lockouts by or with respect to any employee of the Company or
any of the subsidiaries of the Company.
(h) There are
no arbitrations, written grievances or written complaints outstanding or, to the
Knowledge of the Company, threatened against the Company or any of the
subsidiaries of the Company under any of the Company CBAs, except for such
matters as would not reasonably be expected to result in a Material Adverse
Effect. None of the Company or any of the subsidiaries of the Company has
received (i) notice of any unfair labor practice charge or complaint pending or,
to the Knowledge of the Company, threatened before the National Labor Relations
Board or any other Governmental Entity against them, (ii) written notice of any
charge or complaint with respect to or relating to them pending before the Equal
Employment Opportunity Commission or any other Governmental Entity responsible
for the prevention of unlawful employment practices, (iii) notice of the intent
of any Governmental Entity responsible for the enforcement of labor, employment,
wages and hours of work, child labor, immigration, or occupational safety and
health laws to conduct an investigation with respect to or relating to them or
notice that such investigation is in progress, or (iv) notice of any complaint,
lawsuit or other proceeding pending or, to the Knowledge of the Company,
threatened in any forum by or on behalf of any present or former employee of
such entities, any applicant for employment or classes of the foregoing alleging
breach of any express or implied contract of employment, any applicable law
governing employment or the termination thereof or other discriminatory,
wrongful or tortious conduct in connection with the employment relationship,
except for any notice pertaining to matters which would not reasonably be
expected to result in a Material Adverse Effect.
2.16 Intellectual
Property. The
Company and the subsidiaries of the Company exclusively own free and clear of
any Liens other than Permitted Liens, or are validly licensed or otherwise have
the right to use as currently used, all Intellectual Property used in the
conduct of the business of the Company and the subsidiaries of the Company taken
as a whole (“Intellectual
Property”), except for such Intellectual Property where the failure to so
own, be validly licensed or have the right to use would not reasonably be
expected to result in a Material Adverse Effect. The Company and the
subsidiaries of the Company have taken all actions reasonably necessary to
ensure full protection of their respective owned Intellectual Property under all
applicable Laws, except where the failure to take any such actions would not
reasonably be expected to result in a Material Adverse Effect. To the Knowledge
of the Company, no claims are pending that allege that the Company or any of the
subsidiaries of the Company is infringing or otherwise adversely affecting the
rights of any Person with regard to any Intellectual Property other than claims
that would not reasonably be expected to result in a Material Adverse Effect. To
the Knowledge of the Company, no Person is infringing the rights of the Company
or any of the subsidiaries of the Company with respect to any of their
respective owned Intellectual Property in a manner that would reasonably be
expected to result in a Material Adverse Effect.
2.17 Aircraft.
(a) All
aircraft owned or leased by the Company or any of the subsidiaries of the
Company (each, a “Company Aircraft”)
are in airworthy condition and are being maintained according to applicable FAA
standards and the FAA-approved maintenance program of the Company and the
subsidiaries of the Company, except for any Company Aircraft that is not in
airworthy condition or any failures to maintain Company Aircraft as would not
reasonably be expected to result in a Material Adverse Effect. The Company and
the subsidiaries of the Company have implemented maintenance schedules with
respect to their respective Company Aircraft and engines that, if complied with,
would result in the satisfaction of all requirements under all applicable Ads
and FARs required to be complied with in accordance with the FAA-approved
maintenance program of the Company and the subsidiaries of the Company, and the
Company and the subsidiaries of the Company are in compliance with such
maintenance schedules and currently have no reason to believe that they will not
satisfy any component of such maintenance schedules on or prior to the dates
specified in such maintenance schedules, except, in each case, for such
instances of noncompliance as would not reasonably be expected to result in a
Material Adverse Effect.
(b) The
Company has made available to the Parent complete and correct copies of all
Contracts (other than existing aircraft leases) pursuant to which the Company or
any of the subsidiaries of the Company may purchase or lease aircraft, including
the manufacturer and model of all aircraft subject to each
Contract.
(c) Each
Company Aircraft has a validly issued, current individual aircraft FAA
Certificate of Airworthiness with respect to such Company Aircraft that
satisfies all requirements for the effectiveness of such FAA Certificate of
Airworthiness.
(d) Each
Company Aircraft is listed on Schedule 2.17 of the
Disclosure Letter.
2.18 Slots. The
Company and the subsidiaries of the Company have complied with the requirements
of the Aviation Act and any other applicable Laws with respect to each Company
Slot used by the Company or any of the subsidiaries of the Company on the date
hereof at any domestic or international airport, except for such instances of
noncompliance as would not reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any of the subsidiaries of the Company
has received any notice of any proposed withdrawal of the Company Slots by the
FAA, the DOT or any other Governmental Entity as of the date hereof. As of the
date hereof, the Company Slots have not been designated for the provision of
essential air services in accordance with the regulations issued under the
Aviation Act, have not been acquired pursuant to 14 C.F.R. Section 93.219 and
have not been designated for international operations, as more fully detailed in
14 C.F.R. Section 93.217. All reports required by the FAA or any other
Governmental Entity relating to the Company Slots have been filed in a timely
manner, except for such failures to so file as would not reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any of the
subsidiaries of the Company has agreed to any trade, purchase, sale or other
transfer of any of the Company Slots. Each Company Slot is listed in
Schedule 2.18
of the Disclosure Letter.
2.19 Gate
Interests. The
Company and the subsidiaries of the Company have complied with the requirements
of the Aviation Act and any other applicable Laws with respect to all Gate
Interests held or used by the Company or any of the subsidiaries of the Company
on the date hereof at any domestic or international airport, except for such
instances of noncompliance as would not reasonably be expected to result in a
Material Adverse Effect. Each such Gate Interest is listed in Schedule 2.19 of the
Disclosure Letter, and neither the Company nor any of the subsidiaries of the
Company has received any notice of any proposed withdrawal of the Gate Interests
by any Governmental Entity as of the date hereof. Neither the Company
nor any of the subsidiaries of the Company has agreed to any trade, purchase,
sale or other transfer of any of the Gate Interests.
2.20 U.S. Citizen; Air
Carrier. Midwest
Airlines, Inc. is a “citizen of the United States” as defined in the Aviation
Act and is an “air carrier” within the meaning of the Aviation Act operating
under certificates issued pursuant to 49 U.S.C. Sections
41101-41112.
2.21 Insurance. Each
insurance policy maintained by, at the expense of or for the benefit of the
Company or any of the subsidiaries of the Company with respect to its assets,
properties or operations is in full force and effect and neither the Company nor
any subsidiary of the Company is in default with respect to its obligations
under any such insurance policy, except as would not be reasonably expected to
result in a Material Adverse Effect. The insurance coverage of the Company and
the subsidiaries of the Company is customary for business entities of similar
size engaged in similar lines of business. Neither the Company nor any
subsidiary of the Company has received any written notice regarding any (i)
cancellation or invalidation of any material insurance policy, (ii) refusal of
any coverage or rejection of any material claim under any material insurance
policy or (iii) material adjustment in the amount of premiums payable with
respect to any material insurance policy.
2.22 Brokers and
Finders. No
broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the
Company.
|
ARTICLE
3 - REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE MERGER
SUB
|
Except as
expressly contemplated or permitted under this Agreement, the Parent and the
Merger Sub hereby jointly and severally represent and warrant to the Company
that:
3.1 Organization. Each
of the Parent and the Merger Sub is a legal entity duly organized, validly
existing and in good standing under the Laws of the State of
Delaware.
3.2 Authority. Each of
the Parent and the Merger Sub has the requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations under this
Agreement and to consummate the transactions contemplated by this
Agreement. Each of the Parent and the Merger Sub has taken all
requisite action to, and no other action or proceeding on the part of the Parent
or the Merger Sub is necessary for, the execution and delivery by the Parent or
the Merger Sub of this Agreement, the performance by the Parent or the Merger
Sub of its obligations under this Agreement or the consummation by the Parent or
the Merger Sub of the transactions contemplated by this
Agreement. This Agreement has been duly executed and delivered by the
Parent and the Merger Sub and, assuming due authorization, execution and
delivery of this Agreement by the Company, is a valid and binding obligation of
the Parent and the Merger Sub and is enforceable by the Company against the
Parent and the Merger Sub in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereinafter in effect affecting creditors’ rights generally
and general principles of equity.
3.3 Consents and
Approvals. No
Authorization of or from any Governmental Entity or any other person on the part
of the Parent is required in connection with the execution or delivery by the
Parent or the Merger Sub of this Agreement, the performance by the Parent or the
Merger Sub of its obligations under this Agreement or consummation by the Parent
or the Merger Sub of the transactions contemplated by this Agreement except for
notification to the DOT of the substantial change in ownership and management of
subsidiaries of the Company and such filings, if applicable, as the DOT might
require with respect to the international and exemption authority of
subsidiaries of the Company.
3.4 No
Conflicts. The
execution and delivery by the Parent and the Merger Sub of this Agreement does
not, and the performance by the Parent and the Merger Sub of its obligations
under this Agreement or the consummation by the Parent and the Merger Sub of any
of the transactions contemplated by this Agreement will not, (a) conflict with,
or result in or constitute any violation or breach of or default under, or give
rise (either with or without due notice or the passage of time or both or the
happening or occurrence of any other event (including through the action or
inaction of any person)) to any right of termination, amendment, cancellation or
acceleration or any obligation to pay or repay with respect to, or result in the
loss of any benefit under, any provision of (i) the certificate of
incorporation, bylaws or similar organizational documents of the Parent or any
of its subsidiaries (including the Merger Sub) or (ii) any material agreement to
which the Parent or the Merger Sub is a party, or by which the Parent or the
Merger Sub is bound, or to which any of the Parent’s or the Merger Sub’s
properties or assets may be subject; (b) conflict with, or result in or
constitute any violation of any law applicable to the Parent or the Merger Sub;
or (c) result in the creation or imposition of (or the obligation to create or
impose) any Liens on the assets of the Parent or the Merger Sub.
3.5 Brokers and
Finders. No
broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated by this
Agreement that, if the Merger is not consummated, would be payable by the
Company, based upon arrangements made by or on behalf of the Parent or the
Merger Sub.
|
ARTICLE
4 - COVENANTS
|
4.1 Conduct of the Business
Pending Closing. From
the date of this Agreement until the earlier of (x) the Effective Date and (y)
the termination of this Agreement, except as (i) otherwise
contemplated hereby or provided herein or by or in the Investment Agreement,
(ii) set forth in Schedule 4.1 of the
Disclosure Letter, (iii) required by applicable Law or Governmental Entity or
(iv) consented to in writing by the Parent (such consent not to be unreasonably
withheld or delayed), the Company shall, and shall cause each of its
subsidiaries to:
(a) (i) carry
on its business in the ordinary course consistent with past practice,
(ii) use commercially reasonable efforts to preserve intact its present
business organizations, operations and assets, (iii) use commercially reasonable
efforts to keep available the services of its material customers, suppliers,
distributors, licensors, and licensees, in each case in the ordinary course of
business consistent with past practice, and (iv) communicate reasonably promptly
to the Parent any concerns conveyed to the executive officers of the Company by
key employees with respect to their continued employment at the Company or its
subsidiaries;
(b) obtain,
renew and otherwise keep in full force and effect all Company Licenses,
authorizations, licenses, certificates, permits, Slots, and Gate Interests from
the appropriate federal, state and local Governmental Entities, including,
without limitation, the FAA, DOT and all Governmental Entities, necessary to
authorize the Company and each of its subsidiaries to lawfully engage in air
transportation and to carry on commercial passenger service as currently
conducted and as may from time to time be necessary to enable it lawfully to
own, lease or operate aircraft and to perform the obligations herein undertaken
by it, and observe and comply with the terms and conditions of any such
authorizations, licenses, certificates and permits;
(c) keep all
owned and leased aircraft in such condition as may be necessary to enable the
FAA Certificate of Airworthiness of such aircraft to be maintained in good
standing;
(d) conduct
their business in such a manner that, on the Closing Date, the representations
and warranties of the Company contained in this Agreement (as modified by the
Disclosure Letter) which are qualified as to materiality shall be true, correct
and complete and the representations and warranties (as modified by the
Disclosure Letter) not so qualified shall be true, correct and complete in all
material respects as if such representations and warranties were made on and as
of such date, provided that
representations and warranties (as modified by the Disclosure Letter) made as of
a specific date shall be required to be so true and correct (subject to such
qualifications) as of such date only;
(e) maintain
its books of account and records consistent with its past practice in all
material respects;
(f) not amend
its Articles of Incorporation or By-Laws;
(g) not
declare or pay any dividends on or make other distributions in respect of any of
their capital stock;
(h) not
split, combine or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of, or in
substitution for, shares of its capital stock;
(i) not
redeem, repurchase or otherwise acquire any shares of its capital stock other
than intercompany acquisitions of capital stock;
(j) not merge
or consolidate with, or purchase substantially all of the assets of, or
otherwise acquire the business of, any person;
(k) not sell,
transfer, lease or otherwise dispose of any assets other than in the ordinary
course of business and consistent with past practice;
(l) not enter
into any employment or severance agreements with any director, officer or
employee;
(m) not issue
any capital stock or issue or become a party to any subscriptions, warrants,
rights, options, convertible securities or other agreements or commitments of
any character relating to its issued or unissued capital stock, or its other
equity securities, if any, or grant any stock appreciation or similar
rights;
(n) not make
any material change in any method of accounting or accounting practice or policy
other than those required by GAAP;
(o) not make
any election with respect to Taxes, change any currently or previously effective
election relating to Taxes, adopt or change any accounting method relating to
Taxes, enter into any closing agreement relating to Taxes, settle or consent to
any claim or assessment relating to Taxes, waive the statute of limitations for
any such claim or assessment, or file any amended Tax Return or claim for refund
for Taxes;
(p) not adopt
or enter into any new employee benefit plan or amend any existing benefit plan
and not increase the compensation or benefits payable to any officers, directors
or employees of the Company or its subsidiaries (except for increases required
under employment agreements or collective bargaining agreements or any benefit
plans existing on the date hereof); and
(q) not agree
or commit to do any of the foregoing referred to in clauses (f) through (p) of
this Section
4.1.
4.2 Notice of Incidents;
Accidents and Litigation.
(a) The
Company shall or shall cause the Company’s subsidiaries to notify the Parent in
writing or via electronic mail of any (i) incidents or accidents that are
reportable events under FAR occurring on or after the date hereof involving any
property owned or operated by any of the Companies or (ii) any accidents
occurring after the date hereof involving any property owned and operated by the
Companies that resulted or could reasonably be expected to result in damages or
losses in excess of $1,000,000.
(b) Promptly
after obtaining knowledge of the commencement of or the threatened occurrence of
any material Proceeding against or with respect to the Company, any subsidiary
or any capital stock of the Company, the Company shall give written notice
thereof to the Parent.
4.3 Information Rights and
Access. Upon
reasonable notice and subject to the terms of the Confidentiality Agreements,
from and after the date hereof, the Company shall, and shall cause each of the
Company’s subsidiaries, representatives and affiliates to, afford to the Parent,
its affiliates and their respective representatives reasonable access, upon
reasonable notice during normal business hours and in such manner as will not
unreasonably interfere with the conduct of the Company and its subsidiaries’
respective businesses, to their respective facilities, properties, books,
contracts, commitments, records (including information regarding any pending or
threatened Proceeding to which any of the Company or any of its subsidiaries
are, or reasonably expect to be, a party), key personnel, officers, independent
accountants and legal counsel; provided, however, that such
access shall only be provided to the extent that such access would not violate
applicable Law; and provided, further,
that the foregoing shall not require the Company (a) to permit any inspection,
or to disclose any information, that violates any of the Company’s obligations
with respect to confidentiality if the Company shall have used commercially
reasonable efforts to obtain the consent of such third Person to such inspection
or disclosure, (b) to disclose any privileged information of the Company or any
subsidiary of the Company (provided that the
Company shall use its reasonable best efforts to enter into a joint defense or
similar agreement to prevent the loss of any such privilege), or (c) to permit
invasive testing of any real property of the Company or any of the subsidiaries
of the Company. All requests for information made pursuant to this
Section 4.3
shall be directed to the Company’s General Counsel. In no event shall
the Company be required to supply to the Parent, or the Parent’s officers,
employees, accountants, counsel or other representatives, any information
relating to indications of interest from, or discussions with, any other
potential acquirors of the Company. In the event this Agreement is
terminated for any reason, the Parent shall, in accordance with the terms of the
Confidentiality Agreements, return or destroy, or cause to be returned or
destroyed, all nonpublic information obtained from the Company or any of the
subsidiaries of the Company and any copies made of such documents for the
Parent.
4.4 Governmental
Consents. The
Parent and the Company shall, as promptly as practicable following the execution
and delivery of this Agreement, make or cause to be made all filings, notices,
petitions, statements, registrations, submissions of information, application or
submission of other documents required by any Governmental Entity in connection
with the transactions contemplated hereby. Each of the Parent and the
Company will use its reasonable best efforts to cause all documents that it is
responsible for filing with any Governmental Entity under this Section 4.4 to comply
in all material respects with all applicable Laws. Each such party
shall furnish to the other such necessary information and reasonable assistance
as the other may reasonably request in connection with its preparation of such
filings or submissions. Each such party shall keep the other apprised
of the status of any communications with, and any inquiries or requests for
additional information from, any Governmental Entity and shall use its
reasonable best efforts to comply promptly with any such inquiry or
request. Each such party shall use its reasonable best efforts to
obtain any clearance required under applicable Law for the consummation of the
transactions contemplated hereby.
4.5 Third Party
Consents. The
Company shall use commercially reasonable efforts to obtain all consents from
third parties which are required by the terms of any Material Contract to which
it is a party to be obtained in connection with the consummation by it of the
transactions contemplated hereby. The Parent shall use its reasonable
efforts to cooperate in obtaining any such consents, so long as the Parent is
not required to make any payments with respect thereto.
4.6 Publicity. Except
as required by Law or by obligations pursuant to any listing agreement with or
requirement of any national securities exchange or national quotation system,
neither the Company (nor any of its Affiliates) nor the Parent (nor any of its
Affiliates) shall, without the prior written consent of the other, which consent
shall not be unreasonably withheld or delayed, make any public announcement or
issue any press release with respect to the transactions contemplated by this
Agreement. Prior to making any public disclosure required by
applicable Law or pursuant to any listing agreement with or requirement of any
relevant national exchange or national quotation system, the Company or the
Parent, as applicable, as the disclosing party shall consult with the other, to
the extent feasible, as to the content and timing of such public announcement or
press release.
| ARTICLE 5 - ADDITIONAL AGREEMENTS |
5.1 No Control of Other Party’s
Business. Nothing
contained in this Agreement is intended to give the Parent or the Merger Sub as
relates to the Company or any subsidiary of the Company, or vice versa, directly
or indirectly, the right to control or direct the other party’s or its
subsidiary’s operations prior to the Effective Time.
5.2 Transfer
Taxes. The
Company and the Parent shall cooperate in the preparation, execution and filing
of all returns, questionnaires, applications or other documents regarding any
real property transfer or gains, sales, use, transfer, value added, stock
transfer and stamp Taxes, and transfer, recording, registration and other fees
and any similar Taxes that become payable in connection with the transactions
contemplated by this Agreement (together with any related interest, penalties or
additions to Tax, “Transfer
Taxes”). All Transfer Taxes shall be paid by the Surviving
Corporation and expressly shall not be a liability of any shareholder of the
Company.
5.3 Takeover
Statute. If
any “fair price”, “moratorium”, “business combination”, “control
share acquisition” or other form of anti-takeover statute or regulation shall
become applicable to the Merger or the other transactions contemplated by this
Agreement after the date of this Agreement, each of the Company, the Merger Sub
and the Parent and their respective boards of directors shall grant such
approvals and take such actions as are reasonably necessary so that the Merger
and the other transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated herein and otherwise act to eliminate or
minimize the effects of such statute or regulation on the Merger and the other
transactions contemplated hereby.
| ARTICLE 6 - CONDITIONS OF MERGER |
6.1 Conditions to Both the
Parent’s and the Company’s Obligations. The
respective obligations of each party to effect the Merger and the other
transactions contemplated hereby is subject to the satisfaction or waiver at or
prior to the Effective Time of each of the following conditions
precedent:
(a) Investment Agreement
Closing. The
closing of the transactions contemplated by the Investment Agreement shall occur
concurrently with the Closing.
(b) Compliance with Laws, No
Adverse Action or Decision. Since
the date hereof, (i) no Law shall have been promulgated, enacted or entered by
any Governmental Entity and shall remain in effect that enjoins, prevents or
prohibits the consummation of the transactions contemplated hereby or by the
other Transaction Documents; and (ii) no preliminary or permanent injunction or
other order by any Governmental Entity that enjoins, prevents or prohibits the
consummation of the transactions contemplated hereby or by the other Transaction
Documents shall have been issued by a court of competent jurisdiction and shall
be continuing and remain in effect; provided, however, that the
parties hereto shall use their respective reasonable best efforts to have any
such injunction, prevention or prohibition vacated; provided, further, that the
right to assert this condition shall not be available to any party whose breach
of any provision of the Transaction Documents resulted in the imposition of any
such Laws, injunction or order, or the failure of such Laws, injunction or order
to be vacated, as applicable.
(c) Consents and
Approvals. The
Company shall have received all (i) Regulatory Approvals and (ii) all other
approvals, consents and authorizations listed on Schedule 2.5(a) of
the Disclosure Letter, which approvals, consents and authorizations shall not
have been vacated.
6.2 Additional Conditions
Applicable to Parent and Merger Sub. The
respective obligations of the Parent and the Merger Sub to effect the Merger and
the other transactions contemplated hereby is subject to the satisfaction or
waiver by the Parent and the Merger Sub at or prior to the Effective Time of the
following additional conditions:
(a) Representations and
Warranties; Covenants.
(i) Parent
shall not have given written notice to the Company on or prior to July 13, 2009
that it has determined in its sole discretion that the representations and
warranties of the Company set forth in Article 2 hereof, as
modified by the Disclosure Letter, or that Section 4.1 hereof,
as modified by the Disclosure Letter, are not satisfactory to the Parent (such
notice, the “Representation
Notice”) (if the Parent shall not have delivered to the Company the
Representation Notice on or prior to July 13, 2009, the Parent shall be deemed
to have waived this condition).
(ii) (A) The
representations and warranties of the Company set forth in Article 2 hereof, as
modified by the Disclosure Letter, which are not qualified by materiality or by
a Material Adverse Effect shall have been true and correct in all material
respects as of the date of this Agreement and shall be true and correct in all
material respects as of the Effective Time, and (B) the representations and
warranties of the Company set forth in Article 2 hereof, as
modified by the Disclosure Letter, which are qualified by materiality or by a
Material Adverse Effect shall have been true and correct as of the date of this
Agreement and shall be true and correct as of the Effective Time (except in the
case of each of clauses (A) and (B), where such representation and warranty
speaks by its terms of a different date, in which case it shall be true and
correct in all material respects (in the case of clause (A)) and in all respects
(in the case of clause (B)), as of such date); provided, however, that
notwithstanding the foregoing, the conditions set forth in this Section 6.2(a)(ii)
shall be deemed to be satisfied notwithstanding the failure of any such
representations and warranties to be true and correct under the standards set
forth in clauses (A) and (B), as applicable, so long as the representations and
warranties of the Company contained in Article 2 hereof, as
modified by the Disclosure Letter (disregarding all qualifications or
limitations as to “materiality,” “Material Adverse Effect” and words of similar
import set forth therein), shall have been true and correct as of the date of
this Agreement and shall be true and correct as of the Effective Time (in each
case except to the extent such representations and warranties are made as of
another date, in which case such representations and warranties shall be true
and correct as of such other date) in each case except where the failure of such
representations and warranties to be so true and correct would not result in a
Material Adverse Effect. The Company shall have performed in all
material respects all obligations and complied with all agreements,
undertakings, covenants and conditions required to be performed by it hereunder
(in the case of Section 4.1, as
modified by the Disclosure Letter) at or prior to the Effective Time, and the
Company shall have delivered to the Parent at the Closing a certificate dated
the Closing Date and signed by an officer of the Company to the effect that the
conditions set forth in this Section 6.2(a)(ii)
have been satisfied.
(b) Settlement. The
Effective Date (as defined in the Settlement Agreement) shall have
occurred.
(c) No Material Adverse
Effect. Since
the date of this Agreement, no event, circumstance or matter shall have occurred
or arisen that has had, or would reasonably be expected to have, a Material
Adverse Effect.
(d) Tax
Returns. The
Company and each of the subsidiaries of the Company has filed (after taking
into account all applicable extensions) all state and federal income Tax
Returns required to be filed by them prior to the Effective Time.
(e) Audited Financial
Statements. The
Company shall have delivered to the Parent consolidated balance sheets as of
December 31, 2008 and January 31, 2008, and the related consolidated statements
of operations, shareholders’ equity and cash flows for the eleven month period
ended December 31, 2008 and the one month period ended January 31, 2008,
prepared in accordance with GAAP, audited and accompanied by a report and
opinion of Deloitte & Touche LLP.
(f) Due
Diligence. Parent shall not have given written notice to the
Company on or prior to July 13, 2009 that it has determined, in its sole
discretion and without qualification, that the results of its due diligence
review of the Company and the Company’s subsidiaries or the content of the
Disclosure Letter are not satisfactory to the Parent (such notice, the “Diligence Notice”)
(if the Parent shall not have delivered to the Company the Diligence Notice on
or prior to July 13, 2009, the Parent shall be deemed to have waived this
condition).
6.3 Additional Conditions
Applicable to Company. The
obligation of the Company to effect the Merger and the other transactions
contemplated hereby is subject to the satisfaction or waiver by the Company at
or prior to the Effective Time of the following additional
conditions:
(a) Representations and
Warranties; Covenants. (i)
The representations and warranties of the Parent and the Merger Sub set forth in
Article 3
hereof which are not qualified by materiality shall have been true and correct
in all material respects as of the date of this Agreement and shall be true and
correct in all material respects as of the Effective Time, and (ii) the
representations and warranties of the Parent and the Merger Sub set forth in
Article 3 hereof, which are qualified by materiality shall have been true and
correct as of the date of this Agreement and shall be true and correct as of the
Effective Time (except in the case of each of clauses (i) and (ii),
where such representation and warranty speaks by its terms of a different date,
in which case it shall be true and correct in all material respects (in the case
of clause (i)) and in all respects (in the case of clause (ii)), as of such
date) in each case except to the extent that such inaccuracies have not, and
would not, individually or in the aggregate, reasonably be expected to prevent
or materially delay or impede the Parent’s or the Merger Sub’s ability to
consummate the transactions contemplated hereby. The Parent and the
Merger Sub shall have performed in all material respects all obligations and
complied with all agreements, undertakings, covenants and conditions required to
be performed by them hereunder at or prior to the Effective Time, and the Parent
shall have delivered to the Company at the Closing a certificate dated the
Closing Date and signed by an officer of the Parent to the effect that the
conditions set forth in this Section 6.3(a) have
been satisfied.
| ARTICLE 7 - TERMINATION |
7.1 Termination. This
Agreement may be terminated at any time prior to the Effective
Time:
(a) by mutual
consent of the Parent and the Company;
(b) by the
Parent,
(i) if, on or
prior to July 13, 2009, the Parent shall have delivered to the Company the
Representation Notice pursuant to Section 6.2(a)(i) and
a written notice of termination of this Agreement pursuant to Section 7.2,
or
(ii) upon a
breach of any covenant or agreement (in the case of Section 4.1, as
modified by the Disclosure Letter) on the part of the Company set forth in this
Agreement, provided, that if
such breach by the Company of a covenant or agreement was unintentional and is
curable by the Company through exercise of its commercially reasonable efforts,
then the Parent may not terminate this Agreement pursuant to this Section 7.1(b) for
ten (10) consecutive days after delivery of written notice from the Parent to
the Company of such breach, so long as the Company continues to exercise
commercially reasonable efforts to cure such breach (it being understood that
the Parent may not terminate this Agreement pursuant to this Section 7.1(b) if
such breach by the Company is cured during such ten (10) day period); provided, that the
Parent cannot terminate the Agreement pursuant to this clause (b) if it or the
Merger Sub has materially breached this Agreement at or prior to the time of
termination and such breach has not been cured;
(c) by the
Company, upon a breach of any covenant or agreement on the part of the Parent or
the Merger Sub set forth in this Agreement, or if any representation or warranty
of the Parent or the Merger Sub shall have been untrue when made or shall have
become untrue, in either case such that the conditions set forth in Section 6.3(a) hereof
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided, that if
such inaccuracy in the Parent’s or the Merger Sub’s representations and
warranties or breach by the Parent or the Merger Sub of a covenant or agreement
was unintentional and is curable by the Parent or the Merger Sub through
exercise of commercially reasonable efforts, then the Company may not terminate
this Agreement pursuant to this Section 7.1(c) for
ten (10) consecutive days after delivery of written notice from the Company to
the Parent of such breach, so long as the Parent and the Merger Sub continue to
exercise commercially reasonable efforts to cure such breach (it being
understood that the Company may not terminate this Agreement pursuant to this
Section 7.1(c)
if such breach by the Parent or the Merger Sub is cured during such ten (10) day
period); provided, that the
Company cannot terminate this Agreement pursuant to this clause (c) if it has
materially breached this Agreement at or prior to the time of termination and
such breach has not been cured; or
(d) if, on or
prior to July 13, 2009, the Parent shall have delivered to the Company the
Diligence Notice pursuant to Section 6.2(f) and a
written notice of termination of this Agreement pursuant to Section 7.2.
7.2 Notice of Termination;
Effect of Termination. Any
termination of this Agreement under Section 7.1 hereof
will be effective immediately upon (or if termination is pursuant to Section 7.1(b)(ii) or
7.1(c) hereof
and the proviso therein is applicable, ten (10) consecutive days after) the
delivery of written notice thereof by the terminating party to the other
party. In the event of termination of this Agreement as provided in
Section 7.1
hereof, this Agreement shall be of no further force or effect, with no liability
of any party to the other parties, except (i) the provisions set forth in the
last sentence of Section 4.3 hereof,
this Section
7.2 and Article
8 hereof shall survive the termination of this Agreement indefinitely,
(ii) the provisions of the Confidentiality Agreements shall survive the
termination of this Agreement (subject to the time period set forth therein),
and (iii) each party shall bear its own costs and expenses; provided, however, nothing
herein shall relieve any party from liability for any intentional or willful
breach of this Agreement. Termination of this Agreement pursuant to
Section 7.1(b)
shall be the sole and exclusive remedy of the Parent and the Merger Sub in
respect of any breach of or inaccuracy contained in any of the Company’s
covenants, agreements, representations or warranties other than an intentional
or willful breach of this Agreement.
| ARTICLE 8 - GENERAL PROVISIONS |
8.1 Non-Survival of
Representations and Warranties. None
of the representations, warranties or covenants in this Agreement or in any
officer’s certificate delivered pursuant to Section 6.2(a)(ii)
or 6.3(a) shall
survive the Closing Date. Nothing in this Section 8.1 shall in
any way affect the survival of the covenants and agreements contained in the
Investment Agreement and the Note.
8.2 Notices. Unless
otherwise provided, any notice required or permitted by this Agreement shall be
in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by facsimile or electronic mail, or
48 hours after being deposited in the U.S. mail, as certified or registered
mail, with postage prepaid, and addressed as follows (or at such other address
for a party as shall be specified by like notice):
If to the
Company:
Midwest
Air Group, Inc.
▇▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
with a
copy (which shall not constitute notice) to:
c/o TPG
Capital, L.P.
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇
▇▇▇▇
Telephone
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone
No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
and
if to
Parent or Merger Sub, to:
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
President
Telephone
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile
No: (▇▇▇) ▇▇▇-▇▇▇▇
with
copies (which shall not constitute notice) to:
Fulbright
& ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
8.3 Amendments and
Waivers. Any
term of this Agreement may be amended or waived only with the written consent of
each of the parties hereto.
8.4 Interpretation. When
a reference is made in this Agreement to Sections, paragraphs, clauses or
Exhibits, such reference shall be to a Section, paragraph, clause or Exhibit to
this Agreement unless otherwise indicated. The words “include,”
“includes,” and “including” when used herein shall be deemed in each case to be
followed by the words “without limitation.” The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. This Agreement has
been negotiated by the respective parties hereto and their attorneys and the
language hereof will not be construed for or against any party. The
phrases “the date of this Agreement,” “the date hereof,” and terms of similar
import, unless the context otherwise requires, shall be deemed to refer to June
23, 2009. The words “hereof,” “herein,”
“herewith,” “hereby” and “hereunder” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement. All
references in this Agreement to the representations and warranties and to Section 4.1 hereof,
whether made as of the date of this Agreement, the Effective Time, the Closing
Date or any other date, shall mean the representations and warranties and Section 4.1 hereof,
as the case may be, as modified by the Disclosure Letter, notwithstanding the
fact that the Disclosure Letter is delivered after the date of this
Agreement.
8.5 Fee and
Expenses. Each
party shall pay all costs and expenses incurred by it in connection with the
execution and delivery of this Agreement and the transactions contemplated
hereby, including fees of legal counsel; provided, however, that (i) the
Company shall pay for the first $400,000 of legal fees incurred by the Company
in connection with the negotiation and preparation of this Agreement and the
other Transaction Documents, and (ii) the TPG Entities shall pay or reimburse
the Company for legal fees in excess of $400,000 incurred by the Company in
connection with the negotiation and preparation of this Agreement and the other
Transaction Documents.
8.6 Further
Assurances. Each
party to this Agreement shall do and perform or cause to be done and performed
all such further acts and things and shall execute and deliver all such
agreements, certificates, instruments and documents as the other party hereto
may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
8.7 Entire
Agreement. This
Agreement and all other documents required to be delivered pursuant hereto
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior documents, agreements and understandings,
both written and verbal, among the parties with respect to the subject matter
hereof and the transactions contemplated hereby.
8.8 Severability. If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws, then, if possible, such illegal, invalid or
unenforceable provision will be modified to such extent as is necessary to
comply with such present or future laws and such modification shall not affect
any other provision hereof; provided that if such
provision may not be so modified such illegality, invalidity or unenforceability
will not affect any other provision, but this Agreement will be reformed,
construed and enforced as if such invalid, illegal or unenforceable provision
had never been contained herein.
8.9 Assignment. This
Agreement shall not be assignable by operation of law (other than in connection
with a merger, consolidation or similar transaction) or otherwise (any attempted
assignment in contravention hereof being null and void), except that the Parent
or the Merger Sub, upon written notice to the Company, may assign any or all of
its rights and interests hereunder to any of its Affiliates, provided that no such
assignment shall relieve the Parent of its obligations hereunder.
8.10 Governing
Law. Except
to the extent that the laws of the State of Wisconsin or the State of Delaware
are mandatorily applicable to the Merger, the terms of this Agreement shall be
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York applicable to
contracts made and to be performed in the State of New York, including Sections
5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the
New York Civil Practice Law and Rules. Any action against the Company, the
Parent or the Merger Sub, including any action for provisional or conservatory
measures or action to enforce any judgment entered by any court in respect of
any thereof, may be brought in any federal or state court of competent
jurisdiction located in the Borough of Manhattan in the State of New York, and
each of the Company, the Parent and the Merger Sub irrevocably consents to the
jurisdiction and venue in the United States District Court for the Southern
District of New York and in the courts hearing appeals therefrom unless no
federal subject matter jurisdiction exists, in which event, each of the Company,
the Parent and the Merger Sub irrevocably consents to jurisdiction and venue in
the Supreme Court of the State of New York, New York County, and in the courts
hearing appeals therefrom. Each of the Company, the Parent and the
Merger Sub hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement, any claim that it is not personally subject to
the jurisdiction of the above-named courts for any reason other than the failure
to serve process in accordance with this Agreement, that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and to the fullest extent permitted by applicable law, that the
suit, action or proceeding in any such court is brought in an inconvenient
forum, that the venue of such suit, action or proceeding is improper, or that
this Agreement, or the subject matter hereof or thereof, may not be enforced in
or by such courts and further irrevocably waives, to the fullest extent
permitted by applicable law, the benefit of any defense that would hinder,
▇▇▇▇▇▇ or delay the levy, execution or collection of any amount to which such
person is entitled pursuant to the final judgment of any court having
jurisdiction. Each of the Company, the Parent and the Merger Sub
expressly acknowledges that the foregoing waiver is intended to be irrevocable
under the laws of the State of New York and of the United States of
America. EACH OF THE COMPANY, THE PARENT AND THE MERGER SUB HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
8.11 Injunctive
Relief. The
Company and the Parent each agrees that the other’s remedies at law in the event
of any default or threatened default by the Company or by the Parent or the
Merger Sub, respectively, in the performance of or compliance with any of the
terms of this Agreement are not and will not be adequate to the fullest extent
permitted by law, and that such terms may be specifically enforced by a decree
for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise without
the Parent or the Company, respectively, having to prove actual damage or post
any bond or other security.
8.12 No Third Party
Beneficiaries. Nothing
contained in this Agreement, expressed or implied, is intended to confer upon
any person other than the parties hereto and their permitted successors and
assigns, any benefit right or remedies.
8.13 Counterparts. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to each
of the other parties, it being understood that all parties need not sign the
same counterpart.
8.14 Time is of the
Essence.Time is
of the essence as to all performance under this Agreement.
[signatures pages
follow]
IN WITNESS WHEREOF, the
Parent, the Merger Sub and the Company have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.
| PARENT: | |||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Name; ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: President & CEO | |||
| MERGER SUB: | |||
|
RJET
ACQUISITION, INC.
|
|||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Title: President & CEO | |||
|
COMPANY:
|
|||
|
MIDWEST
AIR GROUP, INC.
|
|||
|
|
By:
|
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Title: V.P. Controller | |||
Exhibit
A
Glossary
of Defined Terms
“Adjustment” has the
meaning set forth in Section 1.9 of the
Agreement.
“ADs” has the meaning
set forth in Section
2.10(a) of the Agreement.
“Affiliate” means,
with reference to any Person, another Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned Person. For purposes of this
definition, “control” shall mean the possession, direct or indirect, of the
power to direct or cause the direction of management and policies of a Person,
whether through the ownership of voting securities, by Contract or
otherwise. Notwithstanding the foregoing, no “portfolio company” of
any shareholder of the Company shall be deemed to be an Affiliate of the Company
or such shareholder.
“Agreement” means the
Agreement and Plan of Merger dated June 23, 2009, by and among the Parent, the
Merger Sub and the Company, as the same may be amended from time to time in
accordance with the terms and conditions thereof.
“Articles of Merger”
has the meaning set forth in Section 1.3 of the
Agreement.
“Aviation Act” means
Title 49 of the United States Code, as amended and in effect from time to time,
and the regulations promulgated pursuant thereto.
“Business Day” means
any day except a Saturday, Sunday or other day on which commercial banking
institutions in the State of Wisconsin, the State of Delaware or New York, New
York are required or authorized by applicable Law or executive order to be
closed.
“Certificate of
Merger” has the meaning set forth in Section 1.3 of the
Agreement.
“Closing” means the
consummation of the transactions contemplated by the Agreement, including the
Merger.
“Closing Date” has the
meaning set forth in Section 1.2 of the
Agreement.
“Code” means the
Internal Revenue Code of 1986 and the rules and regulations promulgated
thereunder, each as amended from time to time.
“Company” has the
meaning set forth in the opening paragraph of the Agreement.
“Company Aircraft” has
the meaning set forth in Section 2.17(a) of
the Agreement.
“Company Benefit Plan”
has the meaning set forth in Section 2.9(a) of the
Agreement.
“Company Board” has
the meaning set forth in the recitals to the Agreement.
“Company CBAs” has the
meaning set forth in Section 2.15(a) of
the Agreement.
“Company Common Stock”
has the meaning set forth in Section 1.8(a) of the
Agreement.
“Company ERISA
Affiliate” means any trade or business, whether or not incorporated,
which is treated as a single employer with the Company pursuant to Subsections
(b), (c), (m) or (o) of Section 414 of the Code.
“Company License” has
the meaning set forth in Section 2.10(a) of
the Agreement.
“Confidentiality
Agreements” means the confidentiality agreements executed between Parent
and Company.
“Consideration” has
the meaning set forth in Section 1.8(a) of the
Agreement.
“Contract” means any
agreement, lease, license, note, mortgage, indenture, contract or other legally
binding obligation.
“DFI” means the
Wisconsin Department of Financial Institutions and any successor
thereto.
“DGCL” means the
Delaware General Corporation Law and the rules and regulations promulgated
thereunder, if any, each as amended from time to time
“DHS” means the United
States Department of Homeland Security and any successor thereto.
“Disclosure Letter”
has the meaning set forth in Article 2 of the
Agreement.
“DOT” means the United
States Department of Transportation and any successor thereto.
“Effect” has the
meaning set forth in the definition of “Material Adverse
Effect” in this Exhibit A.
“Effective Time” means
the date and time at which the Certificate of Merger is filed with the SSSD and
the Articles of Merger are filed with the DFI or such later date and time as is
agreed to by the Parent and the Company and set forth in the Certificate of
Merger and the Articles of Merger.
“Environmental Claim”
means any written or, to the Knowledge of the Company, oral investigation, suit,
proceeding, notice, Order, demand, letter, claim or request for information
alleging that the Company or any of the Company Subsidiaries (or, to the
Knowledge of the Company, any Person for whom they may be liable by Law or
Contract) has been, is or may be in violation of or subject to liability under
any Environmental Law, or relating to Hazardous Substances including
contamination or pollution of the environment or any property therefrom, and
exposure of any person thereto.
“Environmental Law”
means any applicable Law, common law (as it relates to Hazardous Substances) or
Order relating to any matter of pollution, protection of human health, the
environment, natural resources or environmental regulation or control or
regarding Hazardous Substances.
“Environmental
License” means any License required under any applicable Environmental
Law.
“ERISA” means the
Employee Retirement Income Security Act of 1974 and the rules and regulations
promulgated thereunder, each as amended from time to time.
“ERISA Benefit Plan”
means an employee benefit plan or program that is also an “employee pension
benefit plan “ (as defined in Section 3(2) of ERISA) or that is also an
“employee welfare benefit plan” (as defined in Section 3(1) of
ERISA).
“Exchange Act” means
the Securities Exchange Act of 1934 and the rules and regulations promulgated
thereunder, each as amended from time to time.
“Excluded Shares” has
the meaning set forth in Section 1.7(a) of the
Agreement.
“FAA” means the
Federal Aviation Administration of the United States and any successor
thereto.
“FAA Certificate of
Airworthiness” means the certificate of airworthiness issued by the FAA
with respect to the Company Aircraft.
“FARs” has the meaning
set forth in Section
2.10(a) of the Agreement.
“FCC” means the United
States Federal Communications Commission and any successor thereto.
“GAAP” means United
States generally accepted accounting principles, consistently
applied.
“Gate Interests” shall
mean all of the right, title, privilege, interest, and authority now or
hereafter acquired or held by the Company or any of the subsidiaries of the
Company in connection with the right to use or occupy holdrooms, jetways and
passenger boarding and deplaning space and any related airport facilities used
by the Company or any of the subsidiaries of the Company for its operations,
including ticket counter space, baggage claim and baggage makeup space, lounge
space, maintenance/hangar facilities, and administrative office space, in any
airport at which the Company or any of the subsidiaries of the Company conducts
scheduled operations.
“Governmental Entity”
means any federal, state, local or foreign government, or political subdivision
thereof, or any multinational organization or authority or any authority, agency
or commission entitled to exercise any administrative, executive, judicial,
legislative, police, regulatory or taxing authority or power, any court or
tribunal (or any department, bureau or division thereof).
“Hazardous Substances”
means chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products, asbestos or asbestos-containing
materials or products.
“Intellectual
Property” has the meaning set forth in Section 2.16 of the
Agreement.
“internal controls”
has the meaning set forth in Section 2.6(d) of the
Agreement.
“Investment Agreement”
has the meaning set forth in the recitals to the Agreement.
“IRS” means the United
States Internal Revenue Service and any successor thereto.
“Knowledge of the
Company” means (i) those facts that are actually known by any executive
officer of the Company, and (ii) those facts that would reasonably be expected
to have come to the attention of any executive officer of the Company if such
executive officer conducted a reasonable due diligence review of the assets,
liabilities and operations of the Company and each subsidiary of the
Company.
“Law” means any
federal, state, local, municipal, foreign, international, multinational,
territorial or other administrative order, constitution, law, ordinance, rule,
regulation, requirement, permit, authorization, statute or treaty and any
guidance issued thereunder, including any transitional relief or rules provided
in connection therewith.
“Lien” means, with
respect to any asset, pledges, mortgages, title defects or objections, claims,
liens, charges, encumbrances or security interests of any kind or
nature.
“Material Adverse
Effect” means any change, circumstance, event or effect (each, an “Effect”) that, when
considered either individually or together with all other Effects, is materially
adverse to the business, properties, assets, liabilities, financial condition or
results of operations of the Company and the subsidiaries of the Company taken
as a whole; provided, however, that in no
event shall any of the following Effects be deemed to constitute, or be taken
into account in determining whether there has been, a “Material Adverse Effect”
hereunder: (i) any Effect that resulted from the entry into or announcement of
the execution of the Agreement, including any loss or threatened loss of, or
adverse change or threatened adverse change in, the relationship of the Company
or any of the subsidiaries of the Company with its customers, employees,
financing sources, suppliers, or strategic partners that resulted from entry
into or the announcement of the execution of the Agreement; (ii) the performance
by the Company of obligations required to be taken under the Agreement (provided that this
clause (ii) shall not apply to Effects resulting from compliance with Section 4.1); (iii)
changes affecting the economy or the securities, credit or financial markets in
general in the United States; (iv) changes that are the result of factors
generally affecting any business in which the Company and/or any subsidiaries of
the Company operate; (v) any adoption, implementation, proposal or change in any
applicable Law or required change in GAAP or interpretation of any of the
foregoing; (vi) any action taken or not taken to which the Parent has consented;
or (vii) the commencement, occurrence or continuation of any war, armed
hostilities or acts of terrorism (except to the extent any of the foregoing
causes any damage or destruction to or renders unusable any facility or property
of the Company or any of the subsidiaries of the Company); provided, however, that changes
set forth in clauses (iii), (iv), (v) and (vii), above, may be taken into
account in determining whether there has been or is a Material Adverse Effect to
the extent such changes have a disproportionate impact on the Company and the
subsidiaries of the Company, taken as a whole (after taking into account the
size of the Company and the subsidiaries of the Company relative to such other
participants), relative to the other participants in the industries and in the
geographic markets in which the Company conducts its business and are not
otherwise excluded by any of clauses (i), (ii) or (vi) above.
“Material Contracts”
has the meaning set forth in Section 2.11 of the
Agreement.
“Merger” has the
meaning set forth in the recitals to the Agreement.
“Merger Sub” has the
meaning set forth in the opening paragraph of the Agreement.
“Merger Sub Board” has
the meaning set forth in the recitals to the Agreement.
“Note” means the
Convertible Note, dated as of the Closing Date, in the amount of $25,000,000
made by the Parent in favor of the holders identified on the signature pages
thereto under the caption “Holders” or their respective assigns.
“Order” means any
award, decision, decree, injunction, judgment, order, ruling, subpoena or
verdict entered, issued, made or rendered by, or any agreement entered into
with, any court, administrative agency or any other Governmental Authority or
arbitrator.
“Owned Real Property”
has the meaning set forth in Section 2.12(a) of
the Agreement.
“Parent” has the
meaning set forth in the opening paragraph of the Agreement.
“Parent Board” has the
meaning set forth in the recitals to the Agreement.
“Parent Subsidiary”
means any direct or indirect Subsidiary of the Parent, including the Merger
Sub.
“Permitted Liens”
means (i) statutory liens for Taxes, assessments or other charges by
Governmental Authorities not yet due and payable or the amount or validity of
which is being contested in good faith and by appropriate Proceedings, (ii)
mechanics’, materialmen’s, carriers’, workmen’s, warehouseman’s, repairmen’s,
landlords’ and similar liens granted or which arise in the ordinary course of
business, (iii) the interest of a landlord under a lease or a licensor under a
license, and (iv) such other Liens or imperfections that are not material in
amount or do not materially detract from the value of or materially impair the
existing use of the property affected by such Lien or imperfection, in each case
of clauses (i) through (iv), above, that would not reasonably be expected to
result in a Material Adverse Effect.
“Person” means any
individual, corporation, partnership, association, trust, unincorporated
organization, limited liability company, other entity or Governmental
Authority.
“Plan” has the meaning
set forth in Section
1.11 of the Agreement.
“Proceeding” means any
action, arbitration, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding.
“Real Property Leases”
has the meaning set forth in Section 2.12(b) of
the Agreement.
“Regulatory Approvals”
means, to the extent necessary in connection with the consummation of the
transactions contemplated by the Transaction Documents, any and all
certificates, permits, licenses, franchises, concessions, grants, consents,
approvals, orders, registrations, authorizations, waivers, exemptions, variances
or clearances from, or filings or registrations with, Governmental Entities (and
shall not include waiting periods otherwise imposed by Law).
“▇▇▇▇▇▇▇▇-▇▇▇▇▇” means
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated
thereunder, each as amended from time to time.
“SEC” means the United
States Securities and Exchange Commission and any successor
thereto.
“Securities Act” means
the Securities Act of 1933 and the rules and regulations promulgated thereunder,
each as amended from time to time.
“Settlement Agreement”
means the Settlement Agreement and Release, dated as of June 12, 2009, among
Skyway Airlines, Inc. (as successor to Astral Aviation, Inc., doing business
under the name Midwest Connect), a Delaware corporation, the Company, Parent,
KfW (formerly known as Kreditanstalt Für Wiederaufbau), an organization
organized under the laws of Germany, and Midwest SPV, as in effect as of the
date hereof (without giving effect to any amendment, waiver, restatement or
other modification of, or supplement or addition to, such agreement without the
consent of the TPG Entities in accordance with Section 4.5 of the Investment
Agreement).
“Shares” has the
meaning set forth in Section 1.8(a) of the
Agreement.
“Slots” or “Company Slots” mean
each and every (i) “slot” as defined in 14 CFR §93.213(a)(2), as that section
may be amended or re-codified from time to time, including slots at ▇▇▇▇▇▇
▇▇▇▇▇▇ Washington National Airport; (ii) operating authorization for a landing
or takeoff operation at a specified time period at any airport in the United
States subject to orders or regulations issued by the FAA (including, but not
limited to, operating authorizations at New York LaGuardia Airport, as defined
in the FAA's final order, Operating Limitations at New York LaGuardia Airport,
Docket No. FAA ▇▇▇▇-▇▇▇▇▇-▇▇ dated December 13, 2006, published in the Federal
Register at 71 Fed. Reg. 77854 (Dec. 27, 2006)), as such order may be amended or
re-codified from time to time, and in any subsequent order or regulation issued
by the FAA, as such order may be amended or re-codified from time to time, (iii)
authorization granted by a Governmental Entity to conduct a landing or takeoff
during a specific hour or other period at any United States or foreign airport,
and (iv) slot exemption pursuant to 49 U.S.C. §§ 41716 and 41718, as such
statute may be amended or re-codified from time to time, including but not
limited to slot exemptions at New York LaGuardia Airport and ▇▇▇▇▇▇ ▇▇▇▇▇▇
Washington National Airport, in each case of the Company or any of the
subsidiaries of the Company now held or hereafter acquired (other than “slots”
which prior to the date of this Agreement have been permanently allocated to
another air carrier and in which the Company or any of the subsidiaries of the
Company holds temporary use rights).
“SSSD” means the
Secretary of State of the State of Delaware and any successor
thereto.
“Surviving
Corporation” has the meaning set forth in Section 1.1 of the
Agreement.
“Tax” means taxes,
charges, fees, levies and other governmental assessments and impositions of any
kind payable to any Governmental Authority, including all interest, penalties
and additions to tax imposed with respect thereto.
“Tax Return” means
returns, reports and information statements with respect to Taxes required to be
filed with the IRS or any other Governmental Authority, including consolidated,
combined and unitary tax returns.
“TPG Entities” has the
meaning set forth in the recitals to the Agreement.
“Transaction
Documents” means this Agreement, the Investment Agreement and the
Note.
“Transfer Taxes” has
the meaning set forth in Section 5.7 of the
Agreement.
“WARN Act” has the
meaning set forth in Section 2.15(c) of
the Agreement.
“WBCL” has the meaning
set forth in Section
2.3 of the Agreement.
Exhibit
B
List
of Shareholders
[Intentionally omitted]